Examination of Witnesses (Questions 200
WEDNESDAY 28 NOVEMBER 2001
PRIMAROLO, MP, MR
200. I am sorry to labour the point but if they
were redeployed they must have been redeployed from one of these
other areas, must they not?
(Ms Primarolo) No,
(Mr Hanson) The 146 are what we have already put into
the system. That is what we have already done or we are in the
process of putting them in. These strategies here are describing
what we want to do next. The 146 were primarily redeployed from
support functions in the Department.
(Ms Primarolo) So we moved staff to the front line
because that is where the risk was.
201. Could I go back to the alcohol and tobacco
fraud review, which started in 1997 and was published in 1998,
where it was recommended that an additional 359 officers to combat
fraud in the Excise duties were needed. That was the original
recommendation in the draft report, but then it had been taken
out by the time the report was finalised and published in July
1998. Was that an opportunity missed?
(Ms Primarolo) The Department was in negotiation on
its spending round and that is part of negotiation on that spending
round as we went into the CSR in terms of what the bid from the
Department would be to cover that area. So the report was published
but clearly the future spending of the Department needed to be
considered in the round with other priorities, both within the
Department and across Government. That is what happened.
202. There were increases at that time then,
even though the recommendation was taken out?
(Ms Primarolo) Yes, because we were acting to redeploy
and looking at where our staff would be better used. You would
expect the Department to be doing that constantly in its risk
assessments about where it should best use its staff, and there
was additional money at that time that was given immediately to
203. You reported yesterday in this paper that
you have cut the revenue loss from cross-Channel smuggling by
76 per cent in one year compared with a target of 10 per cent.
How is it that the target has been achieved with such a very wide
(Ms Primarolo) By the effective and efficient use
of staff and procedures working correctly in developing the strategy.
204. Could it have been that the targets were
too low to begin with?
(Ms Primarolo) Possibly, and that is exactly the point,
and so when we look at targets, we look at what happened last
year, what happened this year and therefore what should happen
205. There has been a record of this for the
last five years of straw men being put up.
(Ms Primarolo) I do not believe that the information
that is now in these two documents in terms of the fraud estimates
is anything but very rigorous. I accept, hence commissioning the
report, that the practice of the Department over an earlier period
needed more rigour than apparently was in place and had been in
place since the emergence of the Single Market where the risks
in this area were considerably increased.
206. It is just that this appearing so recently
rings bells that the practices have not changed very much from
the ones that Roques commented on.
(Ms Primarolo) In the sense that Roques would then
be asking the questions that exactly you are asking, which of
course the Department and the Minister would be too, that now
is on the record to be scrutinised in a much clearer way, which
previously it had not been. It seems to me you come back to the
main point that Roques sought to make about putting in the checks
207. Some press reports have suggested that
the European Commission is not satisfied with the interpretation
of personal use adopted by Customs and Excise for alcohol and
tobacco purchases in the European Union. Have you received formal
communications or complaints from the Commission on this?
(Ms Primarolo) I understand that inquiries are being
made and the Commissioner has said so publicly. This revolves
around the issue of what are called the indicative levels which
are set by the European Union and agreed at the time of the Single
Market by our predecessors, which is the basis for the quantities
that are roughly accepted as being for personal use. Customs go
slightly wider than just using actual quantities carried. There
could be reasons why, and there are many, people are bringing
in more. Therefore, in helping to deal with what used to be called
the white van trade, this has been a very important tool. Whilst
the Commission is making inquiries, our view is that we are acting
within the levels agreed back in 1993 and will say so.
208. If we did need to come forward to the Commission,
would that mean a relaxation of what is being applied at present?
(Ms Primarolo) It is difficult to know exactly what
the Commission might want because the indicative levels are agreed
across Europe. We are operating within those. I am not fully conversant
with the details of the inquiry. I admit that it is difficult
to see how that can progress in terms of the activities, particularly
at our ports and airports, of stopping people from bringing back
quantities that are clearly for re-sale, as opposed to for personal
use. I am sure you have seen reported in many places the exceedingly
large amounts that some individuals carry, claiming that it is
for personal consumption when they are within a certain time period,
and it is, quite frankly, stretching credulity to believe that
that would actually happen. The issue is one of activity within
those levels. We are clearly within the agreement. We have to
wait and see what the Commission has to say in the future.
Chairman: Minister, we are going to leave it
there today. We are obviously, like you, waiting for the Public
Accounts Committee report, which will then reflect further on
how we will report. It might be useful for you to know that we
are minded to focus on the relationship between the Treasury and
Customs and Excise. You are kindly replying to us on the point
about Board minutes. There is an opportunity there, if you wish,
to say anything further to us in your letter about that relationship.
We will return to that particular aspect. Thank you very much
for coming today.